Horizontal integration is the process of combining or acquiring companies that operate at the same level or stage of the supply chain. This can include suppliers, distributors, retailers, or even competitors.
The goal of horizontal integration is to streamline operations, improve efficiencies, and gain a competitive advantage. For example, a manufacturer may horizontally integrate by acquiring a supplier of raw materials.
This integration can lead to improved inventory management, reduced lead times, and increased control over the supply chain.